The City of Madison's Community Development Division will consider a loan subordination request where the subordination results in one of the following:
- Non-cash out simple refinance, such as interest rate reduction and/or there is a mortgage loan product change (e.g. when a balloon or adjustable rate mortgage (ARM) matures and the owner switches to a fixed product). The new first mortgage loan cannot exceed the current mortgage loan balance secured ahead of the CDD loan (excluding reasonable lender fees).
- Cash out can only be used for home improvements.
Lenders can find additional information and requirements on how to request a Subordination on a City loan in the City’s Subordination Checklist and in the City’s Loan Subordination Policy.